anyspacedirect news

Cameron encourages bank lending to SMEs

8th November 2010
Prime Minister David Cameron recently urged companies to re-invest profits in order to expand organically. In return he has promised to encourage banks to lend more openly to smaller businesses. This will be very welcome news to SMEs, many of which went into administration during the economic downturn.

Speaking to business leaders in London, Mr Cameron commented: “British businesses are rebuilding their balance sheets because they have relatively strong profit and loss accounts. If we are to get back to strong growth, these profits need to turn into productive investment.”

The Government has already ear-marked 40 billion pounds of government money for transport, energy and communications project and is confident the private sector will quadruple the amount. The initial 40 billion is part of an estimated 200 billion pounds of public and private sector funds the coalition wants to unlock to boost infrastructure.

Cameron did admit that lending to small business remained a serious problem as banks were still not ready to take on risky investments. However he pledged to do everything he could to open up access to finance.

“I want to make sure we have a banking sector that is really focussed on SME lending, and that’s what drives the business, rather than thinking how can I become a bigger and bigger investment bank.”

Great news for UK SMEs who will have had to cut back operations in the last 24 months in order to survive the economic downturn.

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